High costs of capital shape the mitigation effects of renewable energy deployment globally

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Luke Hatton, Gbemi Oluleye, Malte Jansen, Iain Staffell, and Adam Hawkes show that pricey borrowing blunts the climate gain of green energy in poorer countries. Their study was published in twenty twenty-six. Those countries hold strong sun and wind resources yet face the steepest finance costs.

Using grid carbon paths, the team found one renewable project in a poorer country can cut over twenty times more emissions than one in a rich country. But high capital costs add a large slice to each unit of power there. Finance makes up to about four-fifths of solar cost in such places, against about two-fifths in rich ones. In a world tripling renewables by twenty thirty, the extra bill runs to hundreds of billions a year.

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Source: https://europepmc.org/articles/PMC13562596